Blocking of the e-credit ledger – Mismatch of GSTR-2A and 3B

Blocking of the credit ledger- Mismatch of GSTR-2A and 3B

Recently in a case Delhi High Court directed to decide the matter by way of a reason order where the electronic credit ledger was blocked refer to a mismatch in the ITC claimed in GSTR-3B and that appearing in GSTR-2A.

In december 2019, Rules 86A was introduced in GST rules that provided powers to taxman to block the ITC available in the electronic credit ledgers of a taxpayers if the officer has reasons to believe that the ITC was availed fraudulently.

The restrictions can be imposed in the following circumstances:-
1. ITC is availed by a registered person who is found to be non-existent or is not conducting business from the place for which the registration has been obtained.
2. ITC is available on an invoice on which tax has not been paid to the government. 3. The registration person does not have the invoice or debit note basis which he is claiming.

The invocation of rule 86A requires the existence of reasons to believe that the ITC has been wrongly availed, along with supporting documents. In the absence of proper reasons to believe, the invocation of the rule 86A would be malafide. Further rule 86A does not provide the mismatch of credit in 3B & 2A as a reason for blocking the credit.

Team Edu-Visor
Written by
Babita Sharma (CMA)